Arizona Governor Katie Hobbs Announces FY2027 State Budget

January 23, 2026

On Friday, January 16, Governor Katie Hobbs shared her $17.7B state budget proposal. While many elements of the proposal face long odds in the Republican-controlled legislature, Hobbs’ budget serves as the opening move in negotiations expected to intensify later this spring.


The budget focuses on implementing the federal budget, HR1, as well as affordability and efficiency. With the Governor and legislative leadership already clashing over which tax cuts from HR1 will be included, the stage has been set for another contentious year. While Governor Hobbs has indicated that she will only support middle class tax cuts to the tune of $200M, the legislature is pushing for additional cuts that benefit businesses for $230M.


Governor Targets Affordability Investments & Government Efficiency


The Governor's budget includes $339 million in affordability investments, including housing, childcare, utility assistance, and school meals, funded through a mix of federal relief dollars, state funds, and a new nightly fee on short-term rentals. Hobbs also seeks to make nearly $45 million in childcare funding permanent.

In a bid to improve government efficiency, Hobbs proposes creating Arizona Capacity and Efficiency (ACE), a state-level counterpart to the federal DOGE initiative. Unlike its federal inspiration, ACE would focus on asset sales, modernizing procurement, and training workers in artificial intelligence rather than cutting jobs. Additional oversight resources would target fraud and waste in state programs.


Hobbs Targets Scholarship Program Once More


The Governor is again calling for changes to the Empowerment Scholarship Accounts program, including income caps and limits on unused fund rollovers, while preserving support for students with disabilities. Her proposal also continues funding for public schools through the state land trust and extends last year’s temporary backfill tied to Proposition 123.


Reconciling With Healthcare Funding Needs


To meet new federal Medicaid and SNAP requirements, the budget adds staffing and one-time funding to avoid steep federal penalties that could reach nearly $200 million by 2027.

Additionally, Governor Hobbs' budget accounts for key healthcare funding, including:

  • $10M for heat mitigation efforts, including cooling centers and heat relief training for EMS.
  • HR1 Implementation
  • $10M for staff/operational changes
  • $4M for technology
  • $1M for investigating fraud, waste and abuse
  • $12M to mitigate impacts:
  • $4.3M for critical access hospitals
  • $3.2M for support services for navigating new requirements
  • $4M for crisis services hotline
  • $500,000 for rural transfers

Physician Advocates Speak Up for Healthcare Funding


While the outlook for this year's state budget is dismal, the Arizona Medical Association will not back down from advocating for commonsense healthcare funding, which is critical to the health and well-being of our profession and our patients.

Stay tuned throughout the 2026 Legislative Session!

ADHS Issues Standing Orders for Flu, COVID-19 Vaccine Access

By Admin User • September 18, 2026
Statewide orders keep pharmacists and physicians authorized to vaccinate Arizonans amid uncertainty over the next ACIP meeting. Statewide Orders Cover the 2026-27 Flu & COVID Season The Arizona Department of Health Services has issued statewide standing orders supporting access to the 2026-27 influenza and COVID-19 vaccines approved by the U.S. Food and Drug Administration. Arizonans seeking a flu or COVID-19 vaccine should contact their physician or pharmacy to confirm availability. Why the Orders Were Issued Arizona pharmacists may administer vaccines recommended by the Advisory Committee on Immunization Practices, vaccines recommended by the Centers for Disease Control and Prevention for international travel, or vaccines authorized under a prescription, including a physician-issued public health standing order. With the timing of the next ACIP meeting uncertain, ADHS worked with the Arizona Board of Pharmacy to issue statewide standing orders for the flu and COVID-19 vaccines, which function as a prescription allowing pharmacists and physicians across Arizona to administer them to anyone who wants one. ADHS Medical Advisor Weighs In "Vaccines are one of the most important tools we have to protect our communities. The Influenza and COVID-19 vaccines have been proven safe and effective at preventing severe illness, hospitalization, and death. Vaccines help us limit the spread of disease, reduce pressure on our healthcare system and reduce costs," said Dr. Richard Carmona, ADHS public health medical advisor and the 17th U.S. Surgeon General. "We have issued these standing orders to ensure safe and timely access to the vaccines in alignment with scientific and evidence-based guidance." What Arizonans Should Know The standing orders do not require every pharmacy to offer vaccinations, and they do not guarantee insurance coverage for administration. Coverage and out-of-pocket costs vary by plan, so Arizonans should check with their insurance provider before scheduling an appointment. 

Arizona Asks Supreme Court to Halt Prison Health Care Takeover

By Admin User • September 18, 2026
State attorneys seek an emergency stay after lower courts reject bids to delay receivership of the prison health care system. State Makes a Last-Ditch Appeal Attorneys for the Arizona Department of Corrections, Rehabilitation and Reentry asked the U.S. Supreme Court this week to delay a court-ordered receivership of the state's prison health care system. The request comes after both a federal district court and the 9th U.S. Circuit Court of Appeals declined to pause the takeover. In the recent application, former U.S. Solicitor General Paul Clement, a representative of the department, argued that the state deserves more time to make its case before surrendering control of its operations, including oversight of its employees and health care budget. Roots of the Case The dispute began in 2012 when inmates sued the department, alleging the prison system's inadequate medical, mental health, and dental care amounted to cruel and unusual punishment under the Eighth Amendment. The case went through years of litigation and a failed settlement agreement. In 2023, U.S. District Judge Roslyn Silver ruled that the health care system was "grossly inadequate." The court ordered the prison healthcare system to comply with more than 150 "quality indicators," but according to court-appointed monitors, the department failed to comply with 131 of the measures. In light of this finding, Silver named Annette Chambers-Smith, former director of the Ohio Department of Rehabilitation and Correction, to take over as receiver effective Oct. 19. Arguments on Both Sides Clement argues receivership should be the last resort and that Silver moved to it too quickly. He asserts that the department has made measurable progress, including growing its health care staffing by more than 50%, expanding substance-use treatment access, and adopting a new care model. Corene Kendrick, deputy director of the American Civil Liberties Union National Prison Project, which represents the roughly 25,000 people incarcerated in Arizona prisons, called the department's request a "Hail Mary" and said Silver had given the department years of opportunities to comply before ordering receivership. What Happens Next The Supreme Court has not yet set a deadline for the plaintiffs to respond to the stay request. Separately, the 9th Circuit is now reviewing the merits of the receivership order itself. The department filed its opening brief on Sept. 15, and the plaintiffs' response is due Oct. 15. Information in this article was sourced from the Arizona Mirror .